ARM 400 Practice Exams - all
chapters!!!!
According to the law of large numbers, as the number of exposure units insured increases, - Answer-The
relative accuracy of predictions about future losses increases
The fundamental purpose of a risk management framework is to - Answer-Integrate risk management
throughout the organization
Which one of the following provides a measure of the maximum potential damage associated with an
occurrence? - Answer-Exposure
Aligning risks with the organization's risk appetite defines - Answer-Tolerable uncertainty
An organization must meet the standard of care that it owes to others in order to ensure that - Answer-
Legal obligations are satisfied
Julian was having a conversation with Tania, one of his employees. At this point, Julian said, "What I hear
you say is that you would like to take on more responsibility. Is that correct?" Which one of the
following elements of active listening was Julian illustrating? - Answer-Response
During the past year, International Toys has undertaken four capital projects. The company has
renovated and refurbished one of its aging warehouse buildings. It has purchased the most recent
version of its current order processing computer software. It has added two trucks to its fleet of delivery
vehicles. Lastly, it has purchased a new production machine that will allow it to launch a new product
line. Which one of the following company projects is the most speculative risk? - Answer-The new
production machine
,Encouraging the expression of feelings as well as facts and following up with employees on the problems
they report are two ways that managers and supervisors can - Answer-Cultivate two-way
communication
Which one of the following risk management objectives is critical for a manufacturer seeking new capital
from investors, stockholders, and creditors? - Answer-Reduce the deterrent effects of hazard risks
Which one of the following is a tool that can be used by fraud investigators to compare documents and
analyze notes? - Answer-Text mining
For an organization, a key performance indicator (KPI) measures the performance of a specific activity at
a predetermined level or amount. Which one of the following is an example of a KRI based on a ratio? -
Answer-Inventory turnover
Before speaking with a group or individual, the speaker should think about what he or she wants the
other person(s) to do as a result of the conversation. Which one of the following steps in the
communication process does the speaker complete by doing this? - Answer-Set a clear communication
objective
Mid-State Packing Company, a meat processing company, is the largest private sector employer in
Metro City. First National Bank of Metro City loans money to Mid-State Packaging Company and to many
of the employees of Mid-State. The problem with First National Bank of Metro City loaning money to
both the business and many employees of the business is that - Answer-Loan defaults are likely to be
highly correlated
Which one of the following statements is true with regard to preventative analytics? - Answer-
Preventative analytics uses smart products and data analytics to identify root loss causes and their
implications.
, The emerging technologies applied to risk assessment and control link the physical domain to the virtual
domain. Together, these domains linked by the emerging technologies create a - Answer-connected
ecosystem
In addition to metal detector, many airports have installed a second type of scanning technology for
baggage and cargo. The checked bags and cargo pass through a portal with scanners programmed to
detect and test for explosive trace fumes. These scanners, which detect explosives based on air samples,
are an example of what type of sensor used for risk assessment and control? - Answer-Biochemical
sensors
Which one of the following uses infrared light to detect nearby objects? - Answer-Lidar
SIR's use of drones, video, real-term video scanning, and computer analysis illustrates which one of the
following? - Answer-Preventative analytics
Which one of the following should be part of an organization's standard operating procedures (SOPs)
concerning external stakeholder communications? - Answer-Instructions regarding what types of
information can and cannot be released
When interviewing a risk owner, which one of the following questions should be asked? - Answer-What
steps have been taken to ensure continuity of business in the event of a natural disaster?
A speaker imparts information in verbal communications by - Answer-Having good listening skills and
expressing facts and emotions through words and sometimes visual displays
Which one of the following organizational policies or practices is based on a code of ethics? - Answer-A
disclosure requirement regarding any potential conflict of interest an accountant might have in working
with specific clients
An organization evaluates key stakeholders' attitude toward risk in order to - Answer-Understand what
risks are acceptable and to develop an effective enterprise-wide risk management program
chapters!!!!
According to the law of large numbers, as the number of exposure units insured increases, - Answer-The
relative accuracy of predictions about future losses increases
The fundamental purpose of a risk management framework is to - Answer-Integrate risk management
throughout the organization
Which one of the following provides a measure of the maximum potential damage associated with an
occurrence? - Answer-Exposure
Aligning risks with the organization's risk appetite defines - Answer-Tolerable uncertainty
An organization must meet the standard of care that it owes to others in order to ensure that - Answer-
Legal obligations are satisfied
Julian was having a conversation with Tania, one of his employees. At this point, Julian said, "What I hear
you say is that you would like to take on more responsibility. Is that correct?" Which one of the
following elements of active listening was Julian illustrating? - Answer-Response
During the past year, International Toys has undertaken four capital projects. The company has
renovated and refurbished one of its aging warehouse buildings. It has purchased the most recent
version of its current order processing computer software. It has added two trucks to its fleet of delivery
vehicles. Lastly, it has purchased a new production machine that will allow it to launch a new product
line. Which one of the following company projects is the most speculative risk? - Answer-The new
production machine
,Encouraging the expression of feelings as well as facts and following up with employees on the problems
they report are two ways that managers and supervisors can - Answer-Cultivate two-way
communication
Which one of the following risk management objectives is critical for a manufacturer seeking new capital
from investors, stockholders, and creditors? - Answer-Reduce the deterrent effects of hazard risks
Which one of the following is a tool that can be used by fraud investigators to compare documents and
analyze notes? - Answer-Text mining
For an organization, a key performance indicator (KPI) measures the performance of a specific activity at
a predetermined level or amount. Which one of the following is an example of a KRI based on a ratio? -
Answer-Inventory turnover
Before speaking with a group or individual, the speaker should think about what he or she wants the
other person(s) to do as a result of the conversation. Which one of the following steps in the
communication process does the speaker complete by doing this? - Answer-Set a clear communication
objective
Mid-State Packing Company, a meat processing company, is the largest private sector employer in
Metro City. First National Bank of Metro City loans money to Mid-State Packaging Company and to many
of the employees of Mid-State. The problem with First National Bank of Metro City loaning money to
both the business and many employees of the business is that - Answer-Loan defaults are likely to be
highly correlated
Which one of the following statements is true with regard to preventative analytics? - Answer-
Preventative analytics uses smart products and data analytics to identify root loss causes and their
implications.
, The emerging technologies applied to risk assessment and control link the physical domain to the virtual
domain. Together, these domains linked by the emerging technologies create a - Answer-connected
ecosystem
In addition to metal detector, many airports have installed a second type of scanning technology for
baggage and cargo. The checked bags and cargo pass through a portal with scanners programmed to
detect and test for explosive trace fumes. These scanners, which detect explosives based on air samples,
are an example of what type of sensor used for risk assessment and control? - Answer-Biochemical
sensors
Which one of the following uses infrared light to detect nearby objects? - Answer-Lidar
SIR's use of drones, video, real-term video scanning, and computer analysis illustrates which one of the
following? - Answer-Preventative analytics
Which one of the following should be part of an organization's standard operating procedures (SOPs)
concerning external stakeholder communications? - Answer-Instructions regarding what types of
information can and cannot be released
When interviewing a risk owner, which one of the following questions should be asked? - Answer-What
steps have been taken to ensure continuity of business in the event of a natural disaster?
A speaker imparts information in verbal communications by - Answer-Having good listening skills and
expressing facts and emotions through words and sometimes visual displays
Which one of the following organizational policies or practices is based on a code of ethics? - Answer-A
disclosure requirement regarding any potential conflict of interest an accountant might have in working
with specific clients
An organization evaluates key stakeholders' attitude toward risk in order to - Answer-Understand what
risks are acceptable and to develop an effective enterprise-wide risk management program
